No Statutory Shortcut: Compensation for Acquired Land Must Be Monetary—TDR Cannot Be Forced Upon Landowners: Bombay High Court

"You Can’t Sidestep Article 300A With a TDR—Land Cannot Be Taken Without Fair, Lawful Compensation,"  In a powerful reaffirmation of the constitutional sanctity of private property, the Bombay High Court delivered a resounding judgment declaring that landowners cannot be forced to accept Transferrable Development Rights (TDR) as compensation for compulsory land acquisition under the Mumbai Metropolitan Region Development Authority Act, 1974.

Division Bench of Justice Manish Pitale and Justice Shreeram V. Shirsat unequivocally held that “TDR cannot be unilaterally imposed in lieu of monetary compensation”, calling such action arbitrary, illegal, and violative of Article 300A of the Constitution of India.

This ruling came in the case of Jyoti Baliram Thorat & Others v. Mumbai Metropolitan Region Development Authority & Others, where the petitioners, legal heirs of landowners in Kurla, Mumbai, challenged a 2012 compensation award passed by the MMRDA awarding TDR without any monetary calculation for land acquired under the Santacruz–Chembur Link Road project.

“The Statute Talks of Amount—Not a Substitute for It,” Says Court While Quashing TDR Award

Holding that Section 35 of the MMRDA Act is a complete statutory code for determining compensation, the Court declared that there was no legal basis to bypass the procedure and offer TDR unilaterally.

The Bench ruled, “Offering TDR as compensation... is beyond the four corners of the basis for determination of compensation specified under Section 35 of the said Act.”

It stressed that compensation must be in the form of a monetary amount, determined through the procedure involving assessment of net average income from the land. Referring to Section 35(2)–(6), the Court added, “Even if compensation in TDR form were to be considered, it must be by agreement. It cannot be imposed.”

The impugned award was found to be “wholly arbitrary, illegal and hence, unsustainable.”

“When You Take Property, You Must Follow the Law—Not Just Offer a Benefit”

In words that echo deeply in the context of increasing urban land acquisitions, the Bench made it clear that a landowner’s right to property doesn’t end just because development is needed.

Referring to Article 300A, the Court observed, “Failure on the part of the respondents to determine monetary compensation... rendered the entire action of taking possession of the subject land without authority of law.” It called the action a “clear violation” of the constitutional right to property.

“This Is Not a Case of Delay—It Is a Case of Continuing Violation of Constitutional Right”

Rejecting MMRDA’s plea that the petition was barred by delay (filed in 2024 against an award of 2012), the Court strongly asserted that forcible acquisition without lawful compensation constitutes a “continuing wrong.” Citing binding precedents including Sukh Dutt Ratra v. State of Himachal Pradesh and Vidya Devi v. State of Himachal Pradesh, the Court stressed:

“It would be a travesty to deprive relief to the petitioners on the ground of delay and laches.”

In fact, the Court noted that MMRDA’s own letter dated 01.04.2024 effectively acknowledged the dispute and told the petitioners to approach the court since no tribunal under Section 41 was constituted. “This letter puts paid to the contention that alternative remedy was available.”

“TDR May Be an Option Under MRTP Act, But Never Without Consent—Here, It’s Not Even Contemplated by Law”

The judgment draws strength from the Full Bench ruling in Shree Vinayak Builders and Developers, which held that even where TDR is statutorily permitted (under the MRTP Act), “compensation has to be by consensus, not compulsion.”

Justice Pitale noted, “Petitioners are on a better footing because under the MMRDA Act, there is no option of giving compensation in the form of TDR at all.” Even under Section 35(2), where agreement is contemplated, “the Act refers only to ‘amount’—not development rights or their speculative value.”

“You Cannot Give With One Hand and Take With Another—This Was Not Compensation, It Was Evasion”

The Court carefully dissected the respondents’ claim that TDR was accepted or requested for monetisation by the petitioners, finding that the records showed no such unqualified consent. It noted that the TDR was awarded because the predecessors of the petitioners allegedly “did not demand compensation”, but the Bench stated:

“Failure to demand does not empower the authority to ignore the law. Compensation cannot be presumed; it must be determined in terms of the statute.”

Award Quashed—State Ordered to Pay Monetary Compensation Within Six Months

In a sweeping relief to the landowners, the Court allowed the writ petition and quashed both the award dated 15.12.2012 and MMRDA’s rejection letter dated 01.04.2024. It directed that the entire process for determining monetary compensation under Section 35 be undertaken afresh, including the inquiry, notice, and opportunity to object to the income assessment.

“The respondents are directed to determine the monetary compensation in terms of Section 35... within six months from today,” the Court ordered.

A Landmark in Property Rights and Urban Justice

This judgment stands as a landmark in land acquisition jurisprudence—especially in urban development contexts—by declaring that compensation must be lawful, fair, and within statutory boundaries. It denounces informal arrangements and backdoor practices, even when masked as public interest or administrative efficiency.

When the law says “amount,” the State cannot offer a “benefit” instead. When the Constitution says property shall not be taken without authority of law, no development plan can override that command.

Date of Decision: January 30, 2026